Tax Rate 2021: What You Need To Know About Futa
Understanding FUTA Tax Rate 2021
The Federal Unemployment Tax Act (FUTA) is a federal law that requires employers to pay a tax to the Internal Revenue Service (IRS). This tax is used to help fund state unemployment insurance programs. The FUTA tax rate 2021 is 6.0% of taxable wages, up to the wage base of $7,000. This means that if you have employees who earn more than $7,000 in a calendar year, you will be responsible for paying the 6.0% FUTA tax rate on the first $7,000 of their wages. For employees who earn less than $7,000 in a year, you will only be responsible for paying the 6.0% rate on their wages up to the wage base.
FUTA Credit Reduction States 2021
In 2021, there are 19 states that are subject to a FUTA credit reduction. This means that the amount of FUTA credit that employers receive for paying FUTA taxes is reduced by a certain percentage. The states that are subject to a FUTA credit reduction are: Alaska, Arizona, California, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Mississippi, New Jersey, New York, Ohio, and Pennsylvania. For these states, the FUTA tax rate 2021 is 6.5%, up to the wage base of $7,000. This means that if you have employees who earn more than $7,000 in a calendar year, you will be responsible for paying the 6.5% FUTA tax rate on the first $7,000 of their wages.
FUTA Tax Rate 2021 for Employers
The FUTA tax rate 2021 for employers is 6.0%, up to the wage base of $7,000. This means that employers are responsible for paying the FUTA tax rate on the first $7,000 of their employees' wages. Employers can receive a credit of up to 5.4% for paying state unemployment insurance taxes. This credit is used to reduce the amount of FUTA taxes that employers are responsible for paying. Employers who are subject to a FUTA credit reduction are responsible for paying the 6.5% FUTA tax rate on the first $7,000 of their employees' wages.
Employer FUTA Tax Credits 2021
In 2021, employers can receive a credit of up to 5.4% for paying state unemployment insurance taxes. This credit is used to reduce the amount of FUTA taxes that employers are responsible for paying. The 5.4% credit is only available to employers who have paid their state unemployment insurance taxes in full. If you have not paid your state unemployment insurance taxes in full, you will not be eligible for the 5.4% credit.
FUTA Tax Rate 2021 for Self-Employed Individuals
The FUTA tax rate 2021 for self-employed individuals is also 6.0%, up to the wage base of $7,000. This means that self-employed individuals are responsible for paying the FUTA tax rate on the first $7,000 of their wages. Self-employed individuals are not eligible for the 5.4% credit that is available to employers who have paid their state unemployment insurance taxes in full.
FUTA Tax Rate 2021 for Nonprofit Organizations
The FUTA tax rate 2021 for nonprofit organizations is also 6.0%, up to the wage base of $7,000. This means that nonprofit organizations are responsible for paying the FUTA tax rate on the first $7,000 of their employees' wages. Nonprofit organizations are not eligible for the 5.4% credit that is available to employers who have paid their state unemployment insurance taxes in full.
FUTA Tax Rate 2021 for Farm Employers
The FUTA tax rate 2021 for farm employers is also 6.0%, up to the wage base of $7,000. This means that farm employers are responsible for paying the FUTA tax rate on the first $7,000 of their employees' wages. Farm employers are not eligible for the 5.4% credit that is available to employers who have paid their state unemployment insurance taxes in full.
FUTA Tax Rate 2021 for Household Employers
The FUTA tax rate 2021 for household employers is also 6.0%, up to the wage base of $7,000. This means that household employers are responsible for paying the FUTA tax rate on the first $7,000 of their employees' wages. Household employers are not eligible for the 5.4% credit that is available to employers who have paid their state unemployment insurance taxes in full.
FUTA Tax Rate 2021 for Government Employers
The FUTA tax rate 2021 for government employers is also 6.0%, up to the wage base of $7,000. This means that government employers are responsible for paying the FUTA tax rate on the first $7,000 of their employees' wages. Government employers are not eligible for the 5.4% credit that is available to employers who have paid their state unemployment insurance taxes in full.
Conclusion
The FUTA tax rate 2021 is 6.0%, up to the wage base of $7,000. This means that employers, self-employed individuals, nonprofit organizations, farm employers, household employers, and government employers are all responsible for paying the FUTA tax rate on the first $7,000 of their employees' wages. Employers who are subject to a FUTA credit reduction are responsible for paying the 6.5% FUTA tax rate on the first $7,000 of their employees' wages. Employers can receive a credit of up to 5.4% for paying state unemployment insurance taxes. This credit is used to reduce the amount of FUTA taxes that employers are responsible for paying.